Blue Sky Meats Swings into red
Blue Sky Meats has announced a loss of nearly $500,000 for the year to March 31, with problems in Europe contributing to lower sales prices for the meat process.
The bottom line loss of $449,149 compared to a $3.69 million profit in the previous financial year.
Revenue increased to $114.1m from $108.8m but the company saw difficult conditions in the second half, chairman Graham Cooney said.
The poor second half was a combination of industry and some local problems, he said. Market prices reduced from record levels seen in mid 2011.
"International market prices for almost all items that the company sells reduced at an alarming rate from November to March, against a background of the EU financial challenges.
"This not only spread to other markets but, most importantly, caused sales to dramatically slow as importers only purchased the minimum amount to keep them in business. Experienced meat industry commentators in the United Kingdom and Europe stated these were the worst trading conditions in living memory."
No dividend would be paid this year, against a background of average after tax dividends of 10 cents a share a year, Cooney said.
"This is a disappointing outcome but directors consider it prudent in the circumstances."
Cooney said the opening season price schedule at all meat companies in November, for lamb and mutton, was at levels considerably above what was justified in the market.
"Subsequently prices fell but, at best, only at the same speed as the decreasing bids in the market, which meant that the margin per animal did not improve," he said.
"Slowing sales added to the difficulty as increasing unsold stocks lost value."
New Zealand product in most international markets had been undercut by Australian exports, which were at record levels in early 2012.